Republican Bill Simon, who narrowly lost last year's governor's race in a campaign riddled with spectacular missteps, will take the first steps today toward challenging Democratic Sen. Barbara Boxer next year.

Simon will announce today that he is forming a political action committee and heading a new Republican grassroots organization designed to get out the vote for GOP candidates, both of which will keep him in the political spotlight in the months leading up to the 2004 elections.

Sal Russo, Simon's political guru, declined to say Friday whether the wealthy Los Angeles businessman was definitely in the race against Boxer, but Russo made it clear that the buzz about a new campaign had moved beyond idle speculation.

After his first-ever political run against Davis in the 2002 governor's race, Simon "has renewed his commitment to being of service to the people of California," Russo said. Simon will "explore all his options, and that includes running for the U.S. Senate," according to Russo.

And in the coming race against Boxer, "He's going to be the clear front- runner," Russo said. "(Simon) already enjoys high name ID and is exceptionally popular with Republican primary voters." Other potential GOP candidates, including Reps. Darrell Issa of Vista (San Diego County), Mary Bono of Palm Springs, Doug Ose of Sacramento and George Radanovich of Mariposa, "have a long way to go" to match Simon's strong grass roots organization and familiarity with voters, he said.

But Russo said Simon had the luxury of waiting to make an announcement, because he retains tight connections with the conservative GOP voters who gave him a surprise primary win over former Los Angeles Mayor Richard Riordan.

Reports that Simon is looking to challenge Boxer, a two-term incumbent from Marin, come as hundreds of Republicans gather for a convention aimed at electing new leadership and forging a strategy to win critical elections next year, including the U.S. Senate race and the 2004 presidential race in California.

There's also continuing speculation at the convention about the newly hatched effort to recall Democratic Gov. Gray Davis, which the party's executive committee endorsed Friday.

The first acknowledged potential Davis challenger, former Secretary of State Bill Jones, warned that the partisan endorsement could undermine the recall effort.

"I don't think the party should be out in front pushing for a recall," Jones said.

Nonetheless, Jones said he would put his name forward to replace Davis if the recall qualified for the ballot. Russo, who is involved in the recall campaign, said Simon was "not taking anything off the table" with regard to the recall, either.

Republicans are particularly eager to oust Boxer, who, in the wake of the death of Minnesota's Paul Wellstone, was recently listed as the nation's most liberal senator by the National Journal. In a crowded GOP primary field, the name recognition Simon received from his run for governor could be a significant advantage.

But while Simon lost to Davis by a surprisingly small margin last November, some Republicans worry that voters may remember him more for the memorable mistakes of his maiden political voyage. Those troubles included a headline- grabbing $78 million investment fraud suit filed by a former business partner - - and convicted drug dealer -- and a dramatic claim by Simon that he possessed a photo of Davis illegally receiving a campaign contribution that turned out to be a bogus charge, which he was forced to retract a few days later.

Simon's failure to capitalize on Davis' unpopularity, combined with his campaign's disarray -- as seen in an embarrassing flip-flop on gay rights issues -- prompted veteran GOP adviser Lyn Nofziger to dismiss Simon as "too dumb" to be elected and national pundits to label him "the political loser of the year."

Even in the aftermath of that brutal run for governor, it is "clear that Simon doesn't believe his political career is over . . . and it may not be over," said Bruce Cain, a political science professor at UC Berkeley.

But a U.S. Senate run could be premature, Cain said.

"(Simon) has to put in some time at a lower level," Cain said. "He has to demonstrate a record -- because he can't run on his record as a businessman."

Despite all the problems, Simon has made no secret that he relished his first foray in politics, where he came within 5 points of unseating an incumbent governor with a $65 million war chest. After sinking $12 million of his family's money into his failed campaign, Simon has told friends and former supporters he still harbors hopes of a life of public service.